Next failed to cash in on its full-price approach over Christmas, blaming warm weather, poor stock availability and tough online competition for a “disappointing” 0.4% increase in sales.
The performance update from the British high street chain compares with 2015 company guidance for second-half growth of 3.5%-7.5% and third-quarter growth of 6%.
However, Next, which remained full price in the 60 days from October 26 to December 24, said gross margins were maintained and stock for the end of season Sale is 7% lower than last year.
The business, which has more than 500 shops in Britain and Ireland, is one of the first retailers to report on its festive performance.
Despite sluggish sales, Next added that good control of margins, costs and stock, along with healthy clearance rates means it still expects full-year profits of £817m, towards the lower end of the £810m-£845m forecast issued in October. It is due to report its preliminary full-year results on March 24.
James McGregor, a partner at consultancy firm Retail Remedy, said the numbers underplay the performance.
“Next consistently deliver, remain unflustered and stay true to its core customer,” he said. “Playing down Black Friday and not being drawn into the frenzy despite the lure of footfall, helped Next deliver another quarter of solid trading.
“Although Next’s results are not as strong as we have previously witnessed, they are well ahead of the curve, and noteably ahead of what we expect Marks & Spencer to announce later this week.
“Marks & Spencer must wish it had a fraction of the general merchandise growth Next are delivering.”
Marks & Spencer will report on Christmas trading on Thursday. City analysts predict a drop in like-for-like clothing sales.